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Competency-Based Management and Global Competencies ...

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Ogrean, Herciu & BelascuThis knowing of the way resources are transformed into products <strong>and</strong> theparticularities of this process defines organizational competencies. Bothcompetencies <strong>and</strong> capabilities are important for an organization: while thecompetency represents the “theoretical” side, the capability represents the “practical”part, equally necessary for any value creating process.Two of the leading exponents of this perspective, Prahalad <strong>and</strong> Hamel (1990), arguethat corporations can identify a relatively small number of underlying competenciesthat give them a sustainable strategic edge in the market place. Ulrich <strong>and</strong> Lake(1990) <strong>and</strong> Lawler (1996), argue that organizational capabilities allow organizationsto perform in particular ways that are critical to business performance. Thesecapabilities reside in the systems, structures, cumulative knowledge <strong>and</strong> mindset ofthe organization. As a result, they are hard to develop <strong>and</strong> hard to duplicate, but theyare potentially a significant source of competitive advantage.In general, the use of competency in the strategy literature (see Dainty, P.) focuseson the core competencies <strong>and</strong> capabilities of organizations as the main sources ofcompetitive advantage. Core competencies reflect the collective learning inorganizations – how to coordinate diverse production skills, integrate multiplestreams of technologies, <strong>and</strong> market <strong>and</strong> merch<strong>and</strong>ise diverse products <strong>and</strong>services. (…) For a core competence to create value <strong>and</strong> provide a valuable basisfor synergy among the business in a corporation, it must meet three criteria (Dess,G., Lumpkin, G.T., Eisner, A.B., 2007):• the core competence must enhance competitive advantage(s) by creatingsuperior customer value;• different business in the corporation must be similar in at least one importantway related to the core competence;• the core competence must be difficult for competitors to imitate or findsubstitutes for.As the global competition intensifies, managers will be more <strong>and</strong> more jugged upontheir ability to identify, cultivate <strong>and</strong> exploit distinctive competencies that maypossible the growth of the firm. So, on the short term, firm competitiveness may arisefrom the price per performance ratio registered for its current products. However, onthe long run, the real sources of the advantage must find themselves into themanager’s ability to integrate technologies <strong>and</strong> production abilities into competenciesthat allow the firm to adapt rapidly to a changing environment. They do not diminishin time by using; on the contrary, they consolidate as they are discovered <strong>and</strong>applied (see Prahalad, C.K. <strong>and</strong> Hamel, G., The Core Competence of theCorporation, in Foss, N.J. ed., 1997).The <strong>Competency</strong>-<strong>Based</strong> Approach is a research-supported approach based on theprimary goal of defining the critical behaviors needed for effective <strong>and</strong> superiorindividual <strong>and</strong> organizational performance. Simply defined, a competency is (seeUsing a <strong>Competency</strong>-<strong>Based</strong> Approach: Linking Core <strong>Competencies</strong> to your BusinessStrategy, ThinkWise, Inc., 2007) a set of related behaviors that:• impact job performance;• can be measured against established st<strong>and</strong>ards; <strong>and</strong>• can be improved through training <strong>and</strong> development.115

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